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The Summary of Collection Laws 
2006-2007

NL Member News

Quantum Meruit
by Gregory P. Turner, Esq.

Proving the existence of an express contract in some cases involving goods or services, particularly as to the price to be charged, may become somewhat problematic where the parties fail to fully document the terms of the agreement for some reason.  Where an express contract exists, the express contract will clearly state the exact terms of the contract.  But from time to time, the price of the goods or services is called into question.  One such situation would be where the debtor induces the creditor to perform services but for some reason a price is never formally agreed upon.   In such circumstances, a trier of fact may infer such a term from the actions of the parties, but such evidence may remain circumstantial evidence as opposed to direct evidence of what the price should be.

The fall back position commonly relied on in this type of situation is to seek, as an alternative recovery, the reasonable value of the goods and services provided.  There are several legal terms which address this issue, they include "unjust enrichment", "quasi contract" and the latin term "quantum meruit".  The initial legal issue is defendants' liability or responsibility to the creditor for the services which were rendered.  This will vary based on the facts of each case, but the essential ingredient is that the contract terms as to price were not specifically agreed upon.

Damages, however, are a different animal.  Damages in quantum meruit are commonly described as the "reasonable value of the services provided".  In order to prove the reasonable value of the services provided, The creditor has to prove not just what they wanted to charge for the services but what the services are worth on the open market.  One way of establishing this is to establish the creditor's standard charges at the time in question, and that the market place supported those rates at that time.  Sales figures, for example, of services rendered pursuant to those rates at or about the time in question should be sufficient to establish that the goods or services provided by the creditor are being sold at market value.

Additional evidence of the marketplace for similar goods or services provided by the creditor by competitors could be developed also.  The creditor should be permitted to charge a premium based on the quality of the services and also its brand name (i.e. reputation) and so the first method described would probably be preferable.

Gregory P. Turner
Law offices of Gregory P. Turner
55 Moody Street
Waltham, MA 02452
Phone:  781 647 5535
Fax:  781 647 0764
Email: gptesq@bellatlantic.net